Code Sec. 6404 Abatement of Interest -

Congress amended sec. 6404(e) in 1996 to permit abatement of interest for "unreasonable" error and delay in performing a ministerial or "managerial" act. Taxpayer Bill of Rights 2, Pub. L. 104-168, sec. 301(a)(1) and (2), 110 Stat. 1457 (1996). That amendment applies to tax years beginning after July 30, 1996. Id. sec. 301(c), 110 Stat. 1457. It is rare for any taxpayer to meet this burden of proof.

The IRS's denial of an individual's request for full abatement of interest accruing on three years' unpaid taxes was not an abuse of discretion. After several years of interaction with the IRS relating to his unpaid taxes, the individual requested abatement of the interest on the deficiency, and, after receiving a partial abatement, requested full abatement of interest. Denial of the abatement request was proper as the individual was unable to establish a direct causal link between a claimed error or delay and a specific period during which interest accrued. Additionally, the individual was unable to provide evidence of a claimed incorrect report or transfer to another office that caused an unreasonable delay. --

Robert A. Franklin v. Commissioner, Dkt. No. 15113-05 , TC Memo. 2008-13, January 28, 2008.


MEMORANDUM OPINION

WELLS, Judge: Respondent determined that petitioner is not entitled to an abatement of interest pursuant to section 6404(e) 1 for 1998, 1999, and 2000. The issue for decision is whether respondent's refusal to abate interest constitutes an abuse of discretion.


Background

The parties' stipulations are incorporated into this Memorandum Opinion by reference and, accordingly, are found as facts in the instant case. At the time he filed his petition, petitioner resided in Tampa, Florida.

On August 22, 2001, Internal Revenue Service (IRS) Agent Julie A. Kelley (Agent Kelley) initiated examination of petitioner's 1999 return. On September 10, 2001, Agent Kelley initiated examination of petitioner's 1998 return. On September 25, 2001, Agent Kelley worked on notices of proposed adjustments to items reported on petitioner's income tax returns for 1998 and 1999.

On September 27, 2001, Agent Kelley sent petitioner a letter requesting an extension of the limitations period for assessing petitioner's taxes for 1998. Agent Kelley drew up a Revenue Agent Report on October 2, 2001. Petitioner discussed the Revenue Agent Report with Agent Kelley on October 5, 2001. Subsequently, petitioner discussed the Revenue Agent Report with his representative, Laymond Cloud (Mr. Cloud), and informed Agent Kelley on October 22, 2001, that he would not agree to sign a report until adjustments to all of his returns under audit were consolidated into one report. On October 24, 2001, Agent Kelley started the examination of petitioner's 2000 tax return. On October 31, 2001, Agent Kelley prepared notices of proposed adjustment to items reported on petitioner's return for that year.

Agent Kelley, her supervisor, Group Manager Patricia Carter (Group Manager Carter), petitioner, and Mr. Cloud held a telephone conference on November 7, 2001. The parties to the telephone conference agreed that Mr. Cloud had until November 23, 2001, to decide whether the case should be closed unagreed.

On November 14, 2001, petitioner retained Fred Schultz (Mr. Schultz) as his representative. On November 20, 2001, Mr. Schultz contacted Agent Kelley by phone and faxed her a power of attorney form.

On December 7, 2001, Agent Kelley prepared a notice of proposed adjustment regarding petitioner's return for 2000. On December 17, 2001, Agent Kelley continued working on the case. On December 18, 2001, Agent Kelley prepared notices of proposed adjustment to items reported on petitioner's returns for 1998 and 1999. During early January 2002, Agent Kelley faxed Mr. Schultz a revised Revenue Agent Report and scheduled a conference with Mr. Schultz for January 10, 2002. At the January 10, 2002, conference, Agent Kelley and Mr. Schultz could not reach an agreement. Consequently, Agent Kelley and Mr. Schultz scheduled a subsequent meeting, and Mr. Schultz agreed to provide additional information before that conference. On January 18, 2002, Mr. Schultz provided the additional information. On January 22, 2002, Agent Kelley, Mr. Schultz, petitioner, and Group Manager Carter attended a conference, at which they could not agree.

During February 2002, Agent Kelley was temporarily reassigned. On February 4 and 14, 2002, Agent Kelley informed Mr. Schultz of the temporary reassignment. Agent Kelley was temporarily reassigned during parts of February and March 2002. On March 4, 2002, Agent Kelley contacted Mr. Schultz and worked on petitioner's case. On April 17, 2002, respondent determined that the case should be closed unagreed. On April 23, 2002, respondent closed the case unagreed.

On May 2, 2002, respondent issued petitioner a Letter 950 (30-day letter) for 1998, 1999, and 2000. On May 31, 2002, Mr. Schultz requested consideration by respondent's Appeals Office. On June 17, 2002, respondent's Tampa Appeals Office received petitioner's file. On June 25, 2002, respondent assigned petitioner's case to Appeals Officer Roger Caruso (AO Caruso) and mailed petitioner a letter informing him of AO Caruso's receipt of the case.

On July 5, 2002, respondent sent petitioner a Form 872, Consent to Extend the Time to Assess Tax, for 1998 and 1999. Initially, Mr. Schultz informed respondent that petitioner did not want to extend the period of limitations. However, later in July, Mr. Schultz agreed to extend the period of limitations to March 31, 2003, and AO Caruso prepared a new Form 872. On August 2, 2002, AO Caruso received the Form 872 signed by petitioner, extending the period of limitations to March 31, 2003, for assessment of petitioner's 1998 income taxes.

From September 9 through 13, 2002, AO Caruso attended mediation training. On September 16, 2002, the parties agreed to hold an Appeals conference on November 7, 2002. On October 7, 2002, Appeals Officer Nelson Leduc (AO Leduc) replaced AO Caruso. Mr. Schultz and respondent each left a voicemail for the other in October. On October 31, 2002, AO Leduc prepared a form to extend the period of limitations for assessment until December 31, 2003. However, at the Appeals conference held on November 7, 2002, Mr. Schultz declined to extend the period of limitations for assessment and instead requested 2 weeks to review relevant tax law. Between November 25 and December 5, 2002, Mr. Schultz and AO Leduc discussed extending the period of limitations. Respondent received from petitioner a signed extension of the period of limitations on assessment on December 5, 2002, extending the limitations period to December 31, 2003, for 1998 and 1999.

AO Leduc was on annual leave from December 14, 2002, to January 13, 2003. On January 13 and 14, 2003, AO Leduc contacted petitioner to ascertain petitioner's position regarding an Appeals conference that had been scheduled for February 10, 2003. On January 16, 2003, AO Leduc received petitioner's written position. As scheduled, AO Leduc, petitioner and Mr. Schultz met for an Appeals conference on February 10, 2003. Mr. Schultz contacted AO Leduc on March 17, 2003, and stated that the requested documents would be mailed the next day. After receiving the documents on March 26, 2003, AO Leduc initiated review of the material on April 1, 2003. After reaching a decision on April 2, 2003, AO Leduc mailed the decision to Mr. Schultz and also sent the case to respondent's technical section for final computation.

On May 12, 2003, AO Leduc mailed to Mr. Schultz Form 870-AD, Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Overassessment. After a telephone call from each party, AO Leduc received the signed Form 870-AD on June 5, 2003, signed it, and sent it to Appeals Team Manager Chester Kreidich (ATM Kreidich). On June 5, 2003, AO Leduc prepared an "Appeals Transmittal and Case Memo." On June 12, 2003, ATM Kreidich signed the Form 870-AD.

On July 7, 2003, the Tampa Appeals Office closed petitioner's case. The Tampa Appeals Office thereafter sent petitioner's case file to the Jacksonville Appeals Office to complete processing the case. On July 15, 2003, the Jacksonville Appeals Office received the file. On August 5, 2003, the assessment date was entered into the IRS's computer system.

On August 25, 2003, the IRS assessed deficiencies in petitioner's income tax, with interest, as follows: For 1998, a deficiency of $2,308 and $833.54 of accrued interest (interest calculated from April 16, 1999, to August 25, 2003); for 1999, a deficiency of $26,916 and $6,885.15 of accrued interest (interest calculated from April 16, 2000, to August 25, 2003); for 2000, a deficiency of $34,328 and $4,948.79 of accrued interest (interest calculated from April 16, 2001, to August 25, 2003).

On September 22, 2003, petitioner filed Form 843, Claim for Refund and Request for Abatement. Petitioner requested interest abatement as follows: For 1998, $312.55 of interest abatement; for 1999, $3,430.19 of interest abatement; and for 2000, $3,648.65 of interest abatement. Subsequently, the IRS sent petitioner a letter stating that petitioner's request for interest abatement had been forwarded to respondent's Memphis Office for review.

After assignment of the request for interest abatement to Revenue Agent Susan Harbin (Agent Harbin) in Jacksonville, Florida, on September 29, 2004, Agent Harbin suspended the interest which had accrued during a portion of the examination and otherwise proposed to deny petitioner's request for interest abatement. Agent Harbin informed petitioner of her decisions by letter on November 22, 2004. The IRS adjusted petitioner's account to reflect statutory suspension of interest of $342.37 for 1998 (for October 15, 2000, to May 22, 2002) and of $811.61 for 1999 (for October 15, 2001, to May 22, 2002). On December 4, 2004, petitioner sent the IRS a letter requesting abatement in full. The Jacksonville Appeals Office sent petitioner a letter on December 20, 2004, acknowledging receipt of petitioner's request for interest abatement.

On January 4, 2005, Mr. Schultz contacted the IRS to inquire about petitioner's request for interest abatement. On January 7, 2005, respondent informed Mr. Schultz that petitioner's request for interest abatement would be forwarded to the Area Director. After the IRS assigned petitioner's request for interest abatement on January 21, 2005, to Appeals Officer Charles Kelly (AO Kelly) in the Jacksonville Appeals Office, AO Kelly sent petitioner a letter dated January 27, 2005, acknowledging receipt of petitioner's request for interest abatement.

AO Kelly sent petitioner a letter dated March 31, 2005, summarizing petitioner's request for interest abatement. It included a timeline of petitioner's case and analyzed his request. In the letter, AO Kelly informed petitioner that respondent had determined that delays in petitioner's case were not unreasonable. AO Kelly also requested that petitioner provide contrary authority. After the aforementioned statutory suspension of interest, the IRS prepared an "Appeals Transmittal Memorandum and Case Memo" on May 18, 2005, and the IRS issued a Full Disallowance/Final Determination regarding petitioner's request for interest abatement, which incorporated by reference the March 31, 2005, letter to petitioner.


Discussion

Pursuant to section 6404(e)(1),2 the Commissioner may abate an assessment of interest on: (1) A deficiency attributable to an unreasonable error or delay by an IRS official in performing a ministerial or managerial act or (2) a payment of tax to the extent that an error or delay by the taxpayer in paying such tax is attributable to an IRS official being erroneous or dilatory in performing a managerial or ministerial act.

In deciding whether to grant relief, an error or delay by an officer or employee of the IRS shall be taken into account only if no significant aspect of such error or delay can be attributed to the taxpayer involved, and after the IRS has contacted the taxpayer in writing with respect to such deficiency or payment. Id. Section 6404(e) is not intended to be routinely used to avoid payment of interest. Rather, Congress intended abatement of interest only where failure to do so "would be widely perceived as grossly unfair." H. Rept. 99-426, at 844 (1985), 1986-3 C.B. (Vol. 2) 1, 844; S. Rept. 99-313, at 208 (1986), 1986-3 C.B. (Vol. 3) 1, 208.

The term "ministerial act" means a procedural or mechanical act that does not involve the exercise of judgment or discretion and that occurs during the processing of a taxpayer's case after all prerequisites to the act, such as conferences and review by supervisors, have taken place. See sec. 301.6404-2(b)(2), Proced. & Admin. Regs. A decision concerning the proper application of Federal tax law is not a ministerial act. See id.

The term "managerial act" means an administrative act that occurs during the processing of a taxpayer's case involving the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel. See sec. 301.6404-2(b)(1), Proced. & Admin. Regs. A decision concerning the proper application of Federal tax law is not a managerial act. See id.

The standard for reviewing the Commissioner's decision regarding abatement of interest is abuse of discretion. See sec. 6404(h); Camerato v. Commissioner, T.C. Memo. 2002-28. Generally, the taxpayer must show that, by denying an abatement of interest, the Commissioner exercised his discretion arbitrarily, capriciously, or without sound basis in fact or law. Lee v. Commmissioner, 113 T.C. 145, 149 (1999); Woodral v. Commissioner, 112 T.C. 19, 23 (1999). However, "The Commissioner is in the best position to know what actions were taken by IRS officers and employees during the period for which petitioners' abatement request was made and during any subsequent inquiry based upon that request." Jacobs v. Commissioner, T.C. Memo. 2000-123.

Petitioner alleges that the IRS committed unreasonable errors or delays in performing managerial or ministerial acts. In order to qualify for relief pursuant to section 6404(e), a taxpayer must generally establish a direct causal link between an unreasonable error or delay by the IRS in performing ministerial or managerial acts and a specific period during which interest accrued. Guerrero v. Commissioner, T.C. Memo. 2006-201; Braun v. Commissioner, T.C. Memo. 2005-221. Petitioner failed to establish a direct causal link between a claimed unreasonable error or delay by the IRS and a specific period during which interest accrued on his liabilities. Consequently, the Commissioner's final determination letter did not address that claim. Accordingly, petitioner's argument is without merit.

Additionally, petitioner alleges that there was an unreasonable error or delay "in the return of the case to the agent from review since the report was written incorrectly." However, we can find no evidence in the administrative record of any error or delay in the preparation of a report. Petitioner also alleges that there was an unreasonable error or delay in "the time [the case] was in the Appeals division and transferred to the Miami Office and then back to Tampa." However, we can find no evidence in the administrative record that petitioner's case was ever transferred to the Miami Appeals Office.

We conclude that petitioner has failed to show that any of respondent's employees or officers committed an unreasonable error or delay in performing ministerial or managerial acts. Accordingly, we hold that respondent's denial of petitioner's request for interest abatement was not arbitrary, capricious, or without sound basis in fact or law, and we uphold respondent's final determination not to abate interest.

In reaching all of our holdings herein, we have considered all arguments made by the parties, and to the extent not mentioned above, we find them to be irrelevant, moot or without merit.

To reflect the foregoing,

Decision will be entered for respondent.

1 Unless otherwise indicated, all section references are to the Internal Revenue Code as amended.

2 Congress amended sec. 6404(e) in 1996 to permit abatement of interest for "unreasonable" error and delay in performing a ministerial or "managerial" act. Taxpayer Bill of Rights 2, Pub. L. 104-168, sec. 301(a)(1) and (2), 110 Stat. 1457 (1996). That amendment applies to tax years beginning after July 30, 1996. Id. sec. 301(c), 110 Stat. 1457.


Abatements: Delays in resolving tax matters

A taxpayer who claimed losses from a tax shelter partnership was unable to prove that the IRS abused its discretion in denying his claim for abatement of interest. The passage of a considerable amount of time in the litigation phase of the tax dispute did not establish error or delay by the IRS in performing a ministerial act for purposes of Code Sec. 6404. The taxpayer's contention that the IRS committed ministerial errors when it allegedly failed to communicate relevant information and communicated misinformation to him was also rejected.

W.G. Lee, 113 TC 145, Dec. 53,508.

Similarly:

J. Momot, 92 TCM 303, Dec. 56,633(M), TC Memo. 2006-207.

A.M. Beagles, 85 TCM 995, Dec. 55,075(M), TC Memo. 2003-67.

W. Landvogt, 86 TCM 104, Dec. 55,237(M), T.C. Memo. 2003-217.

A pro se attorney who pled guilty to criminal tax evasion was not entitled to an abatement of interest that accrued on his tax deficiency as a result of the IRS's suspension of civil proceedings against him during its criminal investigation and prosecution. The refusal to continue the civil investigation was the result of a litigation strategy, not the result of a ministerial act.

J.R. Taylor, 113 TC 206, Dec. 53,541. Aff'd, CA-9 (unpublished opinion), 2001-1 USTC ¶50,441.

The IRS's denial of a request by a tax preparer and his wife to abate interest on their deficiency did not constitute an abuse of discretion. Although the taxpayers claimed that too much time had elapsed from the commencement of an audit until the IRS issued a deficiency notice nearly two years later, they failed to show that any agent of the IRS committed an error or delay in performing a ministerial act. Any delay in transferring the taxpayers' petition from the U.S. Embassy in Mexico City to the Tax Court had no effect on the pace of the settlement of the case and, thus, interest that accrued during that period was not subject to abatement. Further, there was no prohibited delay with respect to an IRS Appeals officer's issuance of a settlement offer to the taxpayers. The IRS properly refused to abate interest that accrued solely due to the taxpayer's failure to pay their agreed tax liability, and it did not have to apply a refund that arose in a subsequent tax year to pay the deficiency for the year at issue. Finally, since the taxpayers failed to maintain proper records, interest was not abated to offset expenses they incurred hiring an accountant and traveling to Mexico to obtain records.

G. Mankita, 78 TCM 1216, Dec. 53,673(M), TC Memo. 1999-420.

The IRS's failure to abate interest that accrued on married taxpayers' deficiencies was not an abuse of discretion since the taxpayers did not show that the interest was attributable to any error or delay of an IRS employee acting in an official capacity in performing a ministerial act. The taxpayers failed to support their claim that they attempted to schedule an earlier meeting with an Appeals officer than actually occurred. Thus, they were not entitled to abate interest that accrued from the date they received their first letter from the Appeals office until they reached a settlement with the IRS regarding the amount of their deficiencies. Moreover, their claim that the IRS took unreasonable legal positions did not implicate a ministerial act since decisions regarding whether to settle a case and the application of tax laws involve discretion and judgment.

R. Dundore, 79 TCM 1479, Dec. 53,747(M), TC Memo. 2000-45.

It was an abuse of discretion for the IRS to refuse to abate interest during the period in which the examination of a partnership's return was delayed by the IRS's Quality Review branch since the IRS failed to clearly explain its basis for refusal. The abuse of discretion standard requires the IRS to explain why it has exercised its discretion in a given manner, so that the court is not required to speculate as to the basis of its actions. However, the IRS did not abuse its discretion in refusing to abate interest that accrued during the initial and final stages of the examination while IRS agents were reviewing the partners' expense deductions and considering the imposition of penalties. Further, the IRS's decision not to reassign the case while the assigned Appeals Officer was in training, and the officer's subsequent decision to give precedence to cases on which the statute of limitations was near expiration, were not ministerial acts. Finally, the version of Code Sec. 6404 that was in effect for the tax year at issue did not provide for abatement of interest that accrued due to delays in performing managerial acts.

L.L. Jacobs, 79 TCM 1835, Dec. 53,840(M), TC Memo. 2000-123.

An individual was not entitled to an abatement of interest on his deficiency because he failed to prove that the interest accrued due to any ministerial acts on the part of IRS employees. The fact that his examination took several years to complete did not prove that an erroneous or dilatory act occurred, especially since delays were caused by the expansion of his case, his difficulty in supplying records, the IRS's suspicions of fraud, and the reopening of the examination at the taxpayer's request. A misaddressed letter from the IRS to one of his representatives also was not an error in performing a ministerial act because the letter was mailed to the address provided by the representative, and was remailed once the IRS determined the correct address.

R. Banat, 79 TCM 1941, Dec. 53,858(M), TC Memo. 2000-141. Aff'd, CA-2 (unpublished opinion), 2001-1 USTC ¶50,296.

The IRS's refusal to abate interest that had accrued on an individual's tax liability was not an abuse of discretion since any delay in the proceeding was not due to a ministerial act of the IRS. The Service responded in a timely manner to the taxpayer's correspondence in connection with his unpaid tax liability; however, the taxpayer canceled scheduled appointments and failed to supply requested information. Thus, any error or delay was attributable to the taxpayer. Moreover, his arguments that hardship prevented him from complying with tax laws, that the IRS failed to include vital information in the stipulation of facts and that the IRS's attorney attempted to coerce him into dropping his claim were not proper grounds on which to base an order to abate interest.

J.B. Cosgriff, 80 TCM 156, Dec. 53,983(M), TC Memo. 2000-241.

The IRS did not abuse its discretion in denying a request by a sole proprietor and his wife for an abatement of interest for tax deficiencies that arose, in part, as the result of disallowed business expense deductions and adjustments to the proprietorship's cost of goods sold. The taxpayers could not avail themselves of the exceptions that would otherwise entitle them to an interest abatement in the instant case. They did not identify any specific delay or conduct by the IRS that would constitute a ministerial act or support their claim. Moreover, the time that transpired during the examination, appeals and settlement processes did not constitute error or unreasonable delay in performing a ministerial act.

L.D. Scott, 80 TCM 800, Dec. 54,143(M), TC Memo. 2000-369.

The IRS did not abuse its discretion by denying a couple's request for an abatement of interest accrued on deficiencies assessed against the husband's wholly-owned travel agency. The IRS agent's inability to work on the taxpayers' file for more than six months due to his workload did not constitute a ministerial act.

R.A. Strang, 81 TCM 1566, Dec. 54,325(M), TC Memo. 2001-104.

A long civil and criminal investigation process, which spanned several years and included use of third-party summonses, did not establish error or delay in the government's performance of a ministerial act. Also, the revenue agent responsible for the civil examination did not fail to return to the taxpayer records obtained during the examination, as most of the documents were photocopies obtained by the use of third-party recordkeeper summonses and any original documents were returned.

K.D. Hanks, 82 TCM 1003, Dec. 54,574(M), TC Memo. 2001-319.

The IRS did not abuse its discretion in refusing to abate interest that accrued over several years during an investigation of a limited partnership's returns. The taxpayer's dissatisfaction with the length of time it took to resolve his case did not establish a correlation between a specific error or delay in the performance of a ministerial act and a specific time period for which interest should have been abated as a result of the error or delay.

W.B. Berry, 83 TCM 1013, Dec. 54,580(M), TC Memo. 2001-323.

An individual who was responsible for a significant part, if not all, of the delay in the determination of his tax liability was not entitled to an interest abatement in excess of the amount abated following the IRS's reconsideration of his assessed deficiencies. The individual had protracted the audit by demanding that it be delayed while he completed college and until he returned from a vacation, by failing to pursue review of the IRS's decisions in a timely manner, by refusing to cooperate with the IRS, and by making rude and insulting statements to IRS customer service representatives.

T.R. Camerato, 83 TCM 1147, Dec. 54,632(M), TC Memo. 2002-28.

A tax shelter investor's contention that the IRS exhibited unreasonable delay in signing a decision document pertaining to his case was not supported. Other theories also did not show that accrual of interest on his tax deficiency was attributable to an erroneous or dilatory performance of a ministerial duty by an IRS agent.

T.E. Vanstone, 83 TCM 1751, Dec. 54,762(M), TC Memo. 2002-133.

An IRS delay in assessing a married couple's interest due and owing was not unreasonable and did not justify abatement. A significant portion of the delay was due to various aspects of a related audit and the remainder was not a ministerial error, which required the abatement of additional amounts.

IRS Letter Ruling 200213009 (Technical Advice Memorandum), December 7, 2001.

The IRS did not abuse its discretion in failing to abate interest for specified periods with respect to married taxpayers' disallowed investment credits and losses arising out of a partnership in which they held a limited interest. The delays identified by the taxpayers were not attributable to the IRS's error or delay in performing any ministerial act; rather, they were attributable to the IRS's reasonable prioritization decisions with respect to its caseload. For a second period, however, the IRS conceded that it abused its discretion in failing to abate interest attributable to an unjustified delay. The delay appeared to have occurred in the performance of a ministerial act by the IRS, which was the IRS agent's signing of a stipulation and causing it to be delivered to the Tax Court.

J.G. Goettee, Jr., 85 TCM 867, Dec. 55,049(M), TC Memo. 2003-43. Motion for reconsideration denied in 87 TCM 808, Dec. 55,510(M), TC Memo. 2004-9, below. Aff'd per curiam, CA-4 (unpublished opinion), 2006-2 USTC ¶50,484, 192 FedAppx 212.

Married taxpayers who failed to establish the existence of unusual circumstances or substantial error in the Tax Court's decision involving their entitlement to interest abatements (Dec. 55,049(M), above) were not entitled to reconsideration of that ruling. Their allegation that the IRS erred in computing the amount of interest due was rejected because the prior opinion called for the correction of calculation errors. Also, reconsideration was not the appropriate forum for offering new legal theories or reiterating previously rejected arguments. Further, the record supported the IRS's prioritization decisions, and there was no delay in the assessment of liabilities because the taxpayers had waived restrictions on assessment.

J.G. Goettee, Jr.,, 87 TCM 808, Dec. 55,510(M), TC Memo. 2004-9. Aff'd per curiam, CA-4 (unpublished opinion), 2006-2 USTC ¶50,484, 192 FedAppx 212.

A taxpayer who claimed losses from a tax shelter partnership was unable to prove that the IRS abused its discretion in denying his claim for abatement of interest covering four tax years. The taxpayer's contention that the IRS delayed issuing two final partnership administrative adjustments (FPAAs) until several years after it had sufficient information to issue them did not establish error or delay by the IRS in performing a ministerial act. Further, the record revealed that the IRS's difficulty in obtaining accurate records during the audits hindered the audit process.

J.M. Mekulsia, 85 TCM 1303, Dec. 55,152(M), TC Memo. 2003-138.

Married taxpayers were not entitled to an abatement of interest that resulted from the denial of their deductions for donations of whale meat and whaling expenses. The taxpayers failed to establish that the accrual of interest was attributable to an error or delay by an official or employee of the IRS. In their opening brief, the taxpayers admitted that the delay resulted from a suspension of their case to allow for the enactment of pertinent proposed federal legislation. Moreover, a death in the family of the taxpayers' attorney did not provide a basis for an abatement of interest.

G.N. Ahmaogak, 86 TCM 124, Dec. 55,240(M), TC Memo. 2003-220.

The taxpayers failed to establish that any unreasonable error or delay in the performance of a ministerial duty by an IRS agent contributed to the nonpayment of interest on their tax deficiency. The record indicated that the interest accruals were merely the result of the taxpayers' failure to pay the entire balance owed, and not the result of an IRS employee's erroneous or dilatory performance of a ministerial or managerial act.

J.D. Hinterleitner, 86 TCM 206, Dec. 55,250(M), TC Memo. 2003-228. Aff'd, on another issue, CA-9 (unpublished opinion), 2006-1 USTC ¶50,346.

An abatement of interest was denied because the delay was significantly attributable to the taxpayer. Although the IRS agent working on their case was hospitalized and later died, the case was quickly reassigned, thus, any delay resulted from the taxpayers' continual failure to provide requested documentation.

R.M. Jean, 84 TCM 436, Dec. 54,902(M), TC Memo. 2002-256.

An IRS Appeals officer did not abuse his discretion in issuing a Collection Due Process (CDP) determination permitting the collection of the trust fund recovery penalty and interest from a corporate treasurer/responsible person. While the federal district court determined that it had jurisdiction under Code Sec. 6404(h) to review the IRS's refusal to abate interest on the trust fund recovery penalty, it found that the treasurer did not qualify for an abatement. The record did not show, and the treasurer did not identify, any specific acts attributable to the IRS that would constitute ministerial or managerial acts entitling him to an interest abatement. The mere passage of time did not establish that the IRS erred or delayed in performing a ministerial act.

J.A.P. Leiter, DC Kan., 2004-1 USTC ¶50,162.

A married couple, who invested in a multi-level tax shelter partnership, was entitled to an abatement of interest during the periods that the IRS's inaction delayed the resolution of their case. Since the IRS was unable to explain a six-month delay in sending out the taxpayer's settlement agreement, they were entitled to an abatement of interest for those months. Further, the IRS waited another 3-1/2 months to countersign the document, which was an unreasonable delay. Since the IRS drafted the settlement agreement, its countersignature on the document did not require an act of discretion; it was a ministerial act. Therefore, the taxpayers were entitled to an abatement of interest for those months also.

T.F. Dadian, 87 TCM 1344, Dec. 55,641(M), TC Memo. 2004-121.

The IRS did not abuse its discretion in denying a taxpayer's request for abatement of interest on his tax deficiencies. The taxpayer invested in a partnership that was a limited partner in a tax shelter and claimed losses with respect to his investments. Following an investigation of the tax shelter, the IRS reached a settlement agreement with it and with the taxpayer, resulting in adjustment of the taxpayer's returns, assessment of deficiencies, and payment of those deficiencies by the taxpayer. The IRS denied the taxpayer's request for abatement of interest accrued during the investigation, however, holding the statute of limitation for the assessment was not violated, and all of the delays in the case resulted from discretionary, rather than ministerial, acts by the IRS, and so abatement was not required by statute.

R.J. Jaffe,, 87 TCM 1349, Dec. 55,642(M), TC Memo. 2004-122. Aff'd, CA-9 (unpublished opinion), 2006-1 USTC ¶50,259.

The IRS did not abuse its discretion by rejecting taxpayer's interest abatement claim. IRS issued notice of deficiency determining fraud penalties. Delay caused by suspension of civil action to allow for the criminal prosecution of the taxpayer, including the delay in the issuance of the notice of deficiency, was not a delay in the performance of a ministerial act. Taxpayer's contention that IRS also abused its discretion by failing to disclose the basis for its denial of the claim for abatement was also rejected. Investigation of the taxpayer's case and the criminal proceedings were adequate reasons and did not constitute a delay in the performance of a ministerial act.

R.B. Kemp, Jr., 87 TCM 1406, Dec. 55,661(M), TC Memo. 2004-139.

Married owners of a scrap metal business were not entitled to an abatement of interest. The taxpayers failed to pay the tax liability reported on their tax return for the year at issue, and the liability was outstanding until a third party's bankruptcy trustee paid the IRS on the taxpayers' behalf. Moreover, the taxpayers failed to show that any interest that accrued after the bankruptcy trustee's payment was due to the IRS's error or delay.

J.F. Enos, 123 TC 284, Dec. 55,757.

The Tax Court properly denied taxpayers an abatement of interest. An abatement of interest is generally not available when the taxpayer files a return but does not pay the taxes due, regardless of how long the IRS takes to contact the taxpayer and demand payment. Abatement of interest is also not appropriate where the evidence shows that the taxpayers lacked the assets to pay the taxes, suggesting that their failure to pay was due to inability. In either case the delay in resolving the matter is not the fault of the IRS.

J.N. Wright, CA-5, 2005-1 USTC ¶50,223.

An individual taxpayer's request for abatement of interest accrued on unpaid liabilities was properly denied where the taxpayer provided no basis for a determination that the IRS had made an error or been dilatory in performing any ministerial or managerial act and, in fact, it appeared that the taxpayer was entirely responsible for the delay in payment.

C.A. Bell,, 89 TCM 1070, Dec. 55,998(M), TC Memo. 2005-87.

The IRS's decision not to abate interest imposed on a married couple during a time that the IRS failed to properly code the couple's file was an abuse of discretion. However, while the IRS's failure to properly code the couple's file was a ministerial act, the IRS could not consider the couple's offer-in-compromise during a portion of that time because they had unfiled tax returns. Therefore, the delay during this period was the couple's fault and the IRS's refusal to abate interest was not an abuse of discretion.

T. Bo, 89 TCM 1474, Dec. 56,068(M), TC Memo. 2005-150.

Taxpayer was not entitled to an abatement of interest under Code Sec. 6404(e) because there was no evidence that the agent for the IRS abused his discretion in failing to abate the interest. The errors alleged by the taxpayer (i.e.; conflicting requests for an information return and investment account information and a claim that the taxpayer did not respond to a phone inquiry) were not ministerial or managerial errors. Furthermore, the taxpayer did not link any of the alleged errors by the IRS to the taxpayer's delay in paying his taxes and did not demonstrate that, but for the IRS's actions, the taxpayer would have paid his tax liabilities earlier.

M.W. Braun, 90 TCM 311, Dec. 56,147(M), TC Memo. 2005-221.

The denial of a married couple's claim for abatement of interest accrued with respect to the taxpayers' income tax deficiency was not an abuse of discretion. It was the taxpayers' own mistakes that caused the delay in correctly calculating their income tax liability; and an abatement of interest can be made only when the interest is not attributable to error or delay by the taxpayers.

O.J. Guerrero, 92 TCM 288, Dec. 56,627(M), TC Memo. 2006-201.

An attorney failed to show that an IRS Appeals officer abused her discretion by refusing to abate accumulated interest and penalties for several tax years. The IRS's application of the taxpayer's installment payments to a certain year's tax liability was not a ministerial act under Code Sec. 6404. Moreover, much of the delay was caused by the taxpayer's failure to cooperate with the IRS's investigation.

B.A. Kansky, 93 TCM 921, Dec. 56,842(M), TC Memo. 2007-40.

The IRS properly refused to abate interest imposed on a married couple because they failed to demonstrate that any delay was caused by the unreasonableness of the IRS. In fact, the delay was caused by the taxpayers' failing to provide timely and accurate documentation despite being represented by an attorney.

D. Zisskind, 93 TCM 1037, Dec. 56,874(M), TC Memo. 2007-69.